FOR THE SECOND time in two years, Radisson Hotel Group will have a new owner.
HNA Group of Hainan Island, China, on Aug. 9 agreed to sell the company to Jin Jiang International Holdings Co., a powerhouse in the Chinese and global hospitality industry.
The news ends weeks of speculation as to Radisson Hotel Groups’ fate after the July 3 death of HNA Group’s co-chairman and HNA Group’s ongoing sell-off of many of its overseas investments.
Radisson Hotel Group is made up of two entities – Radisson Hospitality Inc. in Minnetonka, Minnesota, and Radisson Hospitality AB in Europe. In the deal, Jin Jiang would buy Radisson Hospitality Inc. and 51 percent of the outstanding shares in Radisson Hospitality AB, and another 18.5 percent of shares from HNA’s Swedish affiliate. After the sale, Jin Jiang is obligated to acquire the rest of the shares of Radisson Hospitality AB.
The deal is expected to close at the end of the year. Sales price is reportedly $2 billion, which is what HNA Group paid the Carlson family to acquire the company in December 2016.
In April, Radisson announced the company’s name change from Carlson Rezidor Hotel Group. Its brands include Country Inn & Suites, Radisson, Radisson Blu and Radisson Red. Country Inn & Suites by Radisson marked its 30th anniversary last fall. Its growth in the U.S. was largely driven by Asian American franchisees.
During the spring conference in Orlando, Florida, leaders of Radisson said their goal is to make Radisson Hotel Group one of the top three hotel companies in the world over the next five years through aggressive franchise development, redesign of its flagship brand and investment in state-of-the-art technology in its marketing, distribution and management platforms.
John Kidd, chief executive officer of Radisson Hospitality, told the South China Morning Post he is hopeful those efforts would continue under new ownership. “HNA has been extremely supportive of our business,” Kidd said. “Our efforts to transform the company to date have helped make Radisson Hotel Group an extremely attractive acquisition target. We see an immense opportunity with Jin Jiang International to join one of the largest hotel companies in the world.”
Jin Jiang has a global portfolio of 6,794 hotels. Radisson Hotel Group has 1,150 hotels.
Recently, HNA Group restructured its leadership.
Chen Feng, chairman of HNA Group of Hainan Island, China, said in an Aug. 2 announcement, “These changes will help us meet our commitment to refocus around our core aviation and tourism and logistics businesses.”
The personnel changes come one month after the accidental death of HNA Group’s co-founder and co-chairman Wang Jian. He fell off a high wall while sightseeing in France. He was 57. His death left the company in the hands of Feng, Wang’s partner.
Xiangdong “Adam” Tan is chairman of HNA International, a position formerly held by Wang. Tan will continue as vice chairman and CEO of HNA Group.
Wang was the architect of HNA’s acquisition spree over the past six years, amassing more than $90 billion in highly leveraged debt. Under pressure from the Chinese government, HNA is selling some of the assets it had acquired. More than $40 billion of that debt is in the U.S. HNA has sold its stock in Hilton Worldwide and Red Lion Hotels Corp. as well as its interests in financial firms, hotels, real estate and other investments around the world, bringing its total sell-off to date to $17 billion.
Jin Jiang, which owns 12.3 per cent of France’s Accor, has been expanding overseas through acquisitions. In 2017, it bought 75 percent control of India’s Sarovar Hotels for an estimated $50 million. In 2015 it acquired European hotel company Groupe du Louvre for $1.6 billion from Starwood Capital. The company two years ago inked a shared-distribution agreement with Magnuson Worldwide, placing the companies’ hotels on a global distribution network.